Name That Company
My $35 billion business stems from the mammal mus musculus, cousin of Speedy, Mighty, Jerry, Danger, Fievel, Itchy and Motor. My founder once tried to build an ideal city, an "Experimental Prototype Community of Tomorrow." Near it today is my current version of an ideal city, Celebration, Fla. Many people, especially small ones, think I'm supercalifragilisticexpialidocious. I have a big park scheduled to open in Hong Kong by 2006. My first one opened in 1955. I'm the second-biggest media conglomerate in the world, and my TV network is easy as 1-2-3. Who am I? (Answer: Walt Disney Co.)
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Coke frosts analysts
In a move guaranteed to have Wall Street analysts fizzing with frustration, Coca-Cola (NYSE: KO) recently announced it will stop providing specific quarterly or annual earnings guidance. In other words, unlike most major public companies, Coke won't be offering educated guesses regarding how much its revenues and earnings will grow in the next quarter or year.
Coke's CEO, Douglas Daft, explained, "We believe that establishing short-term guidance prevents a more meaningful focus on the strategic initiatives that a company is taking to build its business and succeed over the long run." He added, "We should not run our business based on short-term 'expectations.' We are managing this business for the long term."
The company will still provide information for investors, but it will be more strategic, long-term stuff. Coke doesn't want to stop the flow of information altogether, but it does want to shift its focus.
In one response, and in what has to be one of the more hilarious quotes of the year, a Bear Stearns analyst told the Associated Press, "One of the byproducts of this measure is that you're going to have analysts doing more analysis."
Bravo, Coke, for taking an unpopular stand. Shareholders will be better served by executives who spend time actually running the company and planning for future growth, rather than just trying to meet short-term, short-sighted expectations.